March 10, 2014

Mt. Gox Rumored To Have Pocketed Bitcoins Reported As Stolen

Bitcoin exchange Mt. Gox continues to suffer damages, but the most recent accusations after the company claimed $400 million worth of the currency was lost last month may this time be self-inflicted. Hackers claim to have accessed the company's records and say Mt. Gox may have actually pocketed the cash and show other evidence of fraud.

Mt. Gox described last month's activity as a massive hacker attack, blaming the hackers for the theft of hundreds of millions of dollars’ worth of bitcoins from user accounts. The theft alone bankrupted the company. Forbes reports that on Sunday hackers alleged that at least some of the bitcoins reportedly stolen last month were actually kept by the company, and not stolen.

"On Sunday, hackers took over the Reddit account and personal blog of Mark Karpeles, Mt. Gox’s CEO, to post an angry screed alleging that the exchange he ran had actually kept at least some of the bitcoins that the company had said were stolen from users. 'It’s time that MTGOX got the bitcoin communities wrath instead of [the] Bitcoin Community getting Goxed,' wrote the unidentified hackers, referring to the multiple occasions over its three year history when Mt. Gox has gone offline, delayed trades or suspended withdrawals, events so common that Bitcoin users coined the phrase to be 'goxed'–to suffer from Mt. Gox’s technical glitches," Forbes' Andy Greenberg wrote.

Hackers supplied some evidence with their accusations. The post on Karpeles' personal website contained a 716 megabyte file that the hackers claimed comprised stolen data from Mt. Gox's servers. The file includes an Excel spreadsheet that details over a million trades, "a file that purports to show the company’s balances in eighteen difference currencies, the backoffice application for some sort of administrative access to the databases of Mt. Gox’s parent company Tibanne Limited, a screenshot of the hackers’ access to those databases, a list of Mark Karpeles’ home addresses and Karpeles’ personal CV," Forbes reports.

It is not advisable to actually access the files posted by the hackers. Forbes updated its report to say that users on Reddit warn that the files "may contain malware designed to steal bitcoins." Other users on Reddit confirmed that the data are not fake as they found details of their own account history in the files.

The hackers claim that a balance of 951,116 bitcoins in Mt. Gox's balance is a portion of what Karpeles claims was lost to hackers from user accounts.

The hacking and posting of Mt. Gox information apparently occurred after frustration of Mt. Gox's silence after bitcoin currency in user accounts was stolen last month when a vulnerability was exploited. One company, AU10TIX, found that the crash occurred due to inadequate ID authentication practices.

One vocal victim of the theft last month was the black market site Silk Road, which claims to have lost 4,400 bitcoins worth roughly $2.6 million.